224 



By Eric Lesser 



WOOD SHOPPERS: Builders 

 may see lumber prices fall but 

 not give back $200 gain. 



Housing 

 rebounds 

 slightly 



By Desiree French 

 USA TODAY 



Housing starts rebounded 

 slightly in February after dip- 

 ping to their lowest level in six ' 

 months in January 



Construction starts for sin- i 

 gle-family homes and apart- I 

 ments edged up 2 5'/ lil^l 

 month to a 1.21 iniliion annual 

 rate, the Commerce Depan- | 

 ment said Tuesday I 



In January, housing siiiris 

 fell 8.4% to a seasonally adjust- : 

 ed annual rate of 1.18 million 

 homes. Cause: stormy weather. 



David Berson, chief econo- I 

 misi with the Federal Naiiunul ! 

 Mortgage .Association, also 

 blames lou>y weather for iht- 

 modest upiick in Februarv 

 housing starts Economists had 

 expected an annual rate of I 23 ; 

 million starts. | 



And now, they say the storm | 

 that covered most of the east- | 

 ern USA this week probably 

 will depress March construc- 

 tion, too. 



"But housing activity isn't 

 lost It's just deferred, " Berson 

 says. 



He says he expects housing 

 starts to climb 10% this year 

 from last to about 1.32 million. 

 Last year, starts jumped 18% 

 from 1991 to 1.2 million homes 

 and apartments. 



In February, starts rose 

 16.7% in the West, 7.4% in the 

 Northeast and 7% in the Mid- 

 west They fell 6.3% in the 

 South. 



Also down: building permits 

 for single-family homes. They 

 fell 4.1% last month after fall- 

 ing 4.5% in January. 



"This backward movement 

 is weather-related and tempo- 

 rary. It will be regained later in 

 the year," says David Seiders, 

 an economist with the National 

 Association of Home Builders. 



Lumber cost peaks? 



$500 



Tuesday: 

 $448.20 



tnqB 



The cost of softwood luml>er . 

 per 1 ,000 feet of board 



$400 



$300 



$200 



$100 



Q U h i 1 1 1 M i . |i N 1 1 11 ,1 1 i .,) , ],J.ui l' .lM.iUJJiAt ''' .M 

 MJJ ASONDJ F M 

 I '92 1 '93 — I 



Source Chicago Mercaniilo Exchange. USA TODAY research 



By J L Alberl. USA TODAY 



COVER STORY 



Demand for 

 wood leads to 

 building panic 



By Ellen Neubome 

 USA TODAY 



Lumber prices have near- 

 ly doubled since October 

 US home builders are in a 

 panic They think the public 

 ought to be just as worried. 



"A crisis Ls upon us We 

 have been asked whether or 

 not this jeopardizes the re- 

 covery The answer is clear- 

 ly and unequivocally yes," 

 says Kent Colton, chief exec- 

 utive of the National Associa- 

 tion of Home Builders. 

 Although the price of lum- 

 ^^^^t^n^^^^i^^a^ ^^ dropped Tuesday on fu- 

 tures markets, analysts say 

 it's not about to return to last fall's lows. A contract for 1,000 

 feet of board sold Tuesday for $448. That's down from a 

 high of $480 last week but still far ahead of $236 in October. 

 Those in the building industry say the era of cheap wood 

 is over. "Prices will probably fluctuate, but it's like gasoline. 

 Gasoline is never going back to the 29.9 cents I paid when I 

 borrowed the car in 1964," says Michael Modansky, wood- 

 products manager for Home Depot. "Lumber prices are fol- 

 lowing the same path." As a result, it'll cost you nearly $3 to 

 buy an 8-foot-long 2-by^ board today, vs. $1.60 last fall. 



Though lumber prices may drop the next few days 

 they're not about to give back their $200-plus gain, say« 

 Mark S. Rogers, paper- and forest-products analyst for Pru 

 dential Securities. The biggest drop he expects Is $50. 



Home builders say the price run-up has tacked $5,000 oi 

 the price of a 2,Q0Osquare-foot home. That scares would-b 



Please see COVER STORY next page I 



SPOTTED OWL: Protec- 

 tion cuts available timber 



I1 1*800>441-5494 for federal and state income tax for 



